Tax Return Tips

Another year has passed, and that can only mean one thing: it's time to start thinking about how to maximise the amount of money you get back from your taxes. If you live in Australia and need help filing your tax return and getting the most money possible from the government, consider the following advice.

Before you begin the filing process, your first step should be to ensure that you have collected all of the necessary paperwork. This includes pay stubs, banking information, loan documentation, and anything else that pertains to your personal finances. After that, choose a reliable tax preparation service or software to assist you in navigating the process of filing your taxes. Last but not least, make sure you are aware of all the deductions and credits that are available to you and that you claim them when you do your taxes.

The time of year when taxes need to be filed can be difficult and stressful for some people, particularly those who are unfamiliar with the tax system in Australia. This piece on the blog offers some advice to help make the stress of tax season a little more manageable. Whether you're filing your taxes for the first time or you've been doing them for years, you'll find that the following advice is helpful. To cut a long story short, let's get started right now.

When you are preparing your tax return, one of the most essential things to keep in mind is to maintain accurate records of all of your expenditures. Even if it seems like a minor transaction, you should be sure to maintain the receipts and records for anything that you spend money on throughout the course of the year. This encompasses everything from the cost of groceries to the cost of rent to the cost of gasoline.

Hints for Your Tax Return

If you wait until the end of July or the middle of August, it is likely that the ATO's systems will be able to provide the majority of the information from employers, banks, government agencies, and other third parties. Of course, pre-filling takes care of a large portion of the "paperwork" that is required these days.

After that, we will be able to verify that the information is accurate and submit any deductions that you would like to claim on your taxes. To be completely comprehensive, however, before you come in for your tax appointment, here is a list of the kinds of information that we will need to be able to finish preparing your tax return.

• Payment summaries: These list your income from your company, superfund, or government benefits like Centrelink or Department of Veterans Affairs payments.
• Bank statements: Include information about any interest you have earned and any fees you have paid throughout the time period covered by this report.
• Details of any distributions or dividends you've received, including those you've chosen to reinvest (dividends that you've elected to reinvest must be reported as income), from your shares, unit trusts, or managed fund statements.
• Statements of purchases and sales of investments are required in order to compute gains and losses on capital investments. If you have any shares that you have recently acquired or sold, the relevant information can be found in your online brokerage account, or you can obtain it from your investment adviser or stockbroker.
• Records from your rental property: In the absence of a property manager, you will need to collect information on income received and expenses paid, including any capital gains or losses from the sale of the property. If you hire a property manager, you will likely receive an annual tax statement that outlines income and expenses.
• Foreign income: Specifics on pensions or other forms of income received from abroad.
• Private health insurance policy statement: Information required to complete the private health insurance portion of your tax return.

Earnings That Are Obligatory to Report

It may appear to be self-evident that certain types of income are subject to taxation, but in order to be comprehensive and stay true to our mission, we have compiled a list of the most common types of income that must be reported on your tax return.

• Earnings from employment
• Super pensions, annuities and government payouts
• Profits from investments (including interest, dividends, rent and capital gains)
• Earnings from corporations, partnerships, and trusts
• Earnings from overseas
• Earnings through crowdsourcing platforms, such as donations obtained for a business endeavour in which the owner anticipates making a profit.
• Earnings from participation in the sharing economy, such as those generated by Airtasker, Uber, or Airbnb
• Other revenue, such as payments for compensation and insurance, discounted shares obtained through employee share plans, as well as some prizes and accolades. If you are unsure about something, please check with us.

Deductions

You have the legal right to claim deductions for certain expenses on your tax return. The majority of these expenditures, which are referred to as "work-related expenses," should be directly tied to the production of your income. A deduction will, of course, lower your taxable income, which will result in a lower overall tax bill.

To be eligible for a deduction for costs associated with labour, you must:

• You must have used the money on your own without expecting to be reimbursed.
• It ought to have a clear connection to the production of your taxable income.
• You ought to be in possession of a record to back up the claim that you made.

If your expenditures fall within these parameters, the following is a list of things that you might be allowed to deduct from your taxes.

• Vehicle and travel expenses: This typically does not cover the cost of travel between your place of employment and your residence; but, if you use your automobile for work or work in multiple locations, you may be eligible to claim a deduction for this expense.
• Clothing, laundry and dry-cleaning expenses: If you want to be able to legally deduct the cost of wearing a uniform, that uniform needs to be one of a kind and stand out from the crowd. For instance, it should bear the emblem of your job or be industry-specific, such as chef's pants or coloured safety vests.
• Gifts and donations: Donations can only be deducted if they were given to "deductible gift recipients," which are organisations that have been approved by the ATO.
• Home office expenses: Your computer, phone, or other electronic gadget, in addition to any ongoing maintenance fees, like internet subscription, could be considered charges. You are only allowed to claim the portion of expenses that relate to work and not to your own use, and there is the possibility that there is room for depreciation.
• Interest, dividend and other investment income deductions: Investing periodicals and subscriptions, interest, account fees, depreciation on your computer, and internet connectivity are some examples of expenses associated with investing..
• Self-education expenses: As long as the coursework is relevant to your current position, you might be eligible to get reimbursement for expenditures such as tuition, dues to a student union, textbooks, stationery, internet access, home office costs, professional publications, and even some travel.
• Tools, equipment and other equipment: You are eligible to take a deduction for some or all of the cost of any tools or equipment that you purchase specifically for the purpose of increasing your income. The value of the asset has a role in determining the category of deduction that can be claimed for it. You are eligible for an instant deduction for the cost of any items that either do not come as part of a set and cost less than $300 individually or that do come as part of a set but cost less than $300 when purchased collectively. You are eligible to take a deduction for the value depreciation of things that cost more than $300 individually or that are a component of a set that costs more than $300 when purchased as a whole.
• Other deductions: Overtime lunches, personal super contributions (that is, after tax), union dues, the cost of handling your tax affairs, income protection insurance (but not if it's through your super fund), and other expenditures incurred while earning a living can also be claimed.

Obviously, you should consult with this office for even more suggestions. Even if some of the above seem to apply to your situation, it is still in your best interest to consult with us first, even if some of the above seem to apply to your scenario. Sometimes the circumstances of an individual will define what can and typically cannot be claimed as a deduction.

Away From The Deduction Menu

The Australian Taxation Office (ATO) is committed to assisting taxpayers in accurately calculating their deductions, but it is also on the alert for warning signs that could indicate individuals are acting inappropriately. The following is a list of deductions that, in most cases, you won't be able to claim on your tax return.

• The commute from home to the office is an example of what is typically thought of as private travel.
• Expenses related to your vehicle, unless you are transporting cumbersome items or equipment that your employer compels you to transport because it is necessary for you to conduct your job (and there is no secure area to store the equipment at work).
• Salary has been given up in order to pay for car expenses.
• Expenses related to meals, with the exception of situations in which you were compelled to work away from home overnight.
• Travel for personal reasons, including any personal travel time that may be included in business travel.
• Even if your company needs you to wear them, the regular clothes you purchased specifically for the purpose of wearing them at work (such as a suit or black pants, for example).
• Costs associated with continuing your education that are not directly related to the job that you already hold.
• Expenses incurred for personal usage that are related to the use of the telephone or the internet.

How to Get the Most from Your Tax Return in 2021

The final month of the fiscal year is a particularly hectic period for people in Australia. Some people find it very simple, while others claim that it can be somewhat challenging for them. Even if different people may have different perspectives on lodging tax returns, many of us still look for strategies (that are, of course, legal) to increase our tax refunds.

We don't want to pay any more in taxes than we have to, but at the same time, we're looking for ways to get the biggest possible refund for this fiscal year. You are in luck since the Australian Taxation Office recognises and approves of some tried-and-true strategies that can assist you in lowering your tax bill. These are the results:

Claim Your Expenses for Working from Home

It should not come as a surprise that there has been a considerable growth in the number of workers who work from home over the course of the past year. It is understandable that you may be unaware of the work-from-home expenditures that you are eligible to claim if you are one of those people and are also new to this arrangement.

If this describes you, you are among those people. It is imperative that you get everything done correctly, especially with regard to your tax return, just as it was when you were working in an office.

When you work from home, there is a broad list of things that you can claim and things that you cannot claim. And it may feel like too much for some individuals to handle. To help simplify this information for you, keep in mind that you are eligible to claim anything that has an immediate influence on the manner in which you make your income.

In addition to this, check to see if you have records to back up the claim. Keeping all of these considerations in mind, it is essential to be aware that if you have a distinct workstation that is isolated from the rest of the house, you may be eligible to receive the following benefits:

• Bills for the heating and cooling systems
• The costs of lighting
• Keeping the region clean, making repairs, and performing upkeep on it
• Accessories and furniture for use in a home office
• Purchase and maintenance of computers and other office equipment connected to these products
• Stationery, papers, printer ink, and other computer consumables are included in this category.
• Costs incurred from both internet and phone use

It is important to keep in mind that the prices of computers and other pieces of equipment, in addition to purchases of furniture, are determined by their depreciation costs. The purchase of capital items that cost less than $300 can be promptly written off without being subject to depreciation.

Include All of Your Work-Related Expenses in Your Claim

It is possible that you will be able to take a tax deduction for your vehicle and travel expenditures if you pay for them out of pocket. This is the case regardless of whether you drive your own vehicle to work or use a ridesharing service.

These deductions are, of course, subject to a variety of particular constraints. For instance, you cannot claim the cost of driving from your house to your place of employment or vice versa. On the other hand, you may be eligible for a deduction if you go from one employment to another by car or public transportation.

Other expenses you may be able to claim for are:

• Expenses associated with the purchase and upkeep of uniforms, which are specific to both your work and company
• Garments and personal protective equipment, along with particular accessories, for various employees
• Self-education expenses, including home office costs
• The cost of purchasing tools and equipment, in addition to any other expenses connected
• Payments for digital information and subscriptions, in addition to the costs of purchasing books and periodicals

It bears repeating that in order to qualify for a deduction for any of the costs listed, they must be directly tied to the performance of your work. You are eligible to get reimbursement for any training that enhances your performance of the responsibilities you already have. However, you are not allowed to claim the one that could help you gain a higher-paying job or switch careers.

One more thing to keep in mind, though, is that you are not eligible to receive a refund for the first $250 that you paid for the class.

Recover Your Donation

If you make a donation, the money will be returned to you. For instance, if you make a donation by placing money in a donation box or bucket, you may be eligible to receive up to ten dollars of the total amount that you contributed. You are not need to present a receipt for the kind act that you have performed. When it comes to filing your taxes, you might not even be aware that this additional benefit exists.

However, a tax deduction cannot be claimed for every donation that is made. If you have contributed money or sent a gift, check that it satisfies the requirements outlined in the following paragraphs:

• It could take the shape of a monetary sum or an item, but either way, it is considered to be a voluntary transfer.
• You should not be entitled to anything in return, not even a material gain, an advantage, or other favours of any kind.
• The contribution may take the form of cash, property, or shares of stock, among other things.
• You are need to provide evidence of the contribution, such as a receipt for the donation.
• Any present should have a value of at least two dollars.

When you make a donation to a nonprofit organisation, you could furthermore be required to adhere to particular gift restrictions. If you want to be able to claim a deduction when it comes time to file your taxes, you need to be aware of these conditions.

Get More Money Back for Your Side Job

Back a few years ago, Australians were not compelled to report their secondary income source. Consequently, you were allowed to keep all of your profits without having to pay taxes, regardless of whether you had a property listed on Airbnb or worked as a part-time driver for Uber. Unfortunately, the ATO has tightened up their requirements and now want to know every detail about you. And this includes your involvement in the so-called "gig economy."

You should not fear, however, because you are eligible to receive certain perks for your side hustle. As long as the costs were incurred during the process of earning your income, you may be able to deduct a portion of them. Your tax liability might be reduced, for instance, by deducting expenses associated with your vehicle, home office, and financing obligations. If you transport people about for a living, you may be eligible for a deduction for the time spent using your vehicle in the course of your employment. However, you will be required to keep a record of the expenses you incurred as well as the time you spent working.

Your tax return does not have to include everything. You are free to keep any money you earn through activities that are not intended to turn a profit, such as hobbies that you like doing in your spare time. Take, for instance, the fact that you bake cakes and someone purchased a handful of them. Selling an old bicycle on an online platform will not require you to report any of the money you make from the sale of the bicycle.

Last Day to File Taxes

In most cases, the due date for submitting your return is the 31st of October. You have until Monday, November 1 to submit your application because October 31 falls on a Sunday this year.

If you choose to employ the services of a registered tax agent, they will typically have special lodgement schedules and will be able to file returns for clients later than October 31st. If you make use of these services, you can avoid the penalties associated with late filing. You have until October 31st to enlist the services of a registered tax agent if you are going to use one.

The Australian Taxation Office (ATO) recommends that you get in touch with them as soon as possible if you are having trouble completing your tax responsibilities or are unable to lodge by October 31st.

Even if you file your own tax return after the deadline, you still have until November 21 to pay any tax bill that emerges from it. This is true regardless of whether you filed your return before or after the deadline.

Frequently Committed Fiscal Errors

According to the Australian Taxation Office (ATO), the majority of errors made by Australians while filing their tax returns are either basic mistakes made by persons who file their returns early or failure to disclose all of their income.

As of the end of July, information regarding a taxpayer's job income, bank interest, share dividends, and health fund will be automatically included in myTax. As a result, taxpayers who try to submit their returns early are more likely to be compelled to go back and revise their claim.

The Australian Taxation Office has identified as big mistake-makers those people who make significant purchases at the end of the financial year sales period in the expectation of claiming the entire amount.

Deductions for things bought for work should be divided up according to the number of days worked in the current fiscal year. Purchases that exceed the $300 threshold are subject to additional depreciation requirements over a set period of time (effective life).

How Will COVID-19 Make Filing Taxes Difficult?

While Australians have long been aware of the potential issues that may arise as a result of the ongoing coronavirus pandemic, they will need to be much more sensitive to the effects of the pandemic when it comes time to file their tax returns in 2021.

According to the Australian Tax Office, there have been a number of adjustments made to the process of generating income tax returns in an environment using the COVID-19 standard.

Changes have been made by the ATO to the tax returns of Australians who fall into the following categories:

• were on JobSeeker payments
• were on JobKeeper payments
• were/are working from home
• accessed their superannuation early
• received stand down payments
• changed jobs